Business in Brief / Tel Aviv Shares Rally in Wake of Global Rally

EZchip CEO defends merger terms with Mellanox; Receiver is named for Bramly's Rubicon group; China, India seeking potash price cuts.

Bloomberg

Tel Aviv shares rally in wake of global rally

Tel Aviv share prices powered higher on Sunday, catching up with a global market rally over the weekend sparked by China’s cut in deposit and lending rates and European Central Bank Governor Mario Draghi’s remarks suggesting a number of possible stimulus measures in December. The benchmark TA-25 index ended 2.3% higher at 1,580.33 points while the TA-100 added 1.7% to 1,365.96. Trading was an unusually heavy 1 billion shekels ($260 million) for a Sunday. Teva played the starring role as the most active share of the day and leading TA-100 shares on a 5.9% jump to close at 232.40 shekels. Other blue chips to post strong gains included Opko Health, which added 5.3% to 37.40 and The Israel Corporation, which rose 3.8% to end at 1,033. Energy shares rallied (see story on this page) as did tech shares. In foreign currency trading, the euro tumbled 1.3% on Friday to a Bank of Israel rate of 4.3056 shekels after Draghi’s remarks.(Eran Azran)

EZchip CEO defends merger terms with Mellanox

EZchip CEO Eli Fruchter over the weekend defended the valuation he’s agreed to sell the company for to Mellanox, a sale opposed by shareholders led by U.S. hedge fund manager Raging Capital. “The company’s my baby. I founded it 15 years ago. I know it well and I know the risks. It would never occur to me to recommend selling it for anything less than the right price,” Fruchter told TheMarker. Shareholders will vote on the Mellanox offer of $25.50 a share on November 12. Last week Raging Capital, which holds 6.5% of EZchip, urged investors to vote no, arguing that the company’s stock price can more than double in the next two years if it stays on its own. Raging Capital’s portfolio manager, Bill Martin, predicted EZchip shares would reach $61.45 in 2017, because major competitor Marvell Technologies is planning to exit EZchip’s market segment.  EZchip shares ended up 0.6% at 95.60 shekels ($24.82). (Omri Zerachovitz)

Receiver is named for Bramly’s Rubicon group

The once high-flying financial empire of Amir Bramly, whom the Israel Securities Authority accuses of misleading investors, is now entirely under control of a court-appointed receiver. On Sunday Tel Aviv District Court Judge Iris Lushi-Abadi appointed attorney Erez Hever as temporary receiver for Bramly’s Rubicon Group after she tasked him with the same job at Barmly’s Kela investment fund on Thursday. Lushi-Abadi said Kela was in danger of insolvency. Hever told the court that the two businesses were indistinguishable from one another and that he needed control over both to settle Kela’s affairs. Bramly agreed to extend the receivership to Rubicon, saying he wanted to help Kela investors recover their money. Hever said that it appeared neither Rubicon nor Kela had any cash and that he would have to sell portfolio assets to raise cash for operations. (Shelly Appelberg)

China, India seeking potash price cuts

Chinese and Indian buyers of the crop fertilizer potash are seeking a cut of $10 to $20 per metric ton in their next contracts with global suppliers, Israel Chemicals CEO Stefan Borgas said on Thursday. Potash prices have fallen in the past year due to excessive mining capacity, dry weather in India that limited sowing and a new Chinese tax. Contracts with Chinese and Indian buyers set a floor for sales to Brazil and the United States on a spot basis. But suppliers are likely to push back on requests for bargains. “We would always argue for more stable pricing or an increase, because if the industry is looking for new capacity, which it needs four or five years from now, then they need to give us incentive to invest,” said Borgas, whose company is the world’s sixth-largest potash producer. Chinese buyers including Sinofert Holdings Ltd and Indian importers most recently agreed to pay $315 and $332 a ton respectively, Borgas said. Sinofert’s contract expires on December 31 and the Indian contract runs through March 2016. ICl shares closed up 3.1% at 22.13 shekels ($5.69). (Reuters)